At the retail industry’s signature annual event, the National Retail Federation (NRF) Big Show in New York City, IBM went big by showcasing a demo featuring an end-to-end use case employing blockchain in supply chain. We were joined by hundreds of clients and vendors that were excited to learn more about the technology.
Many people that approached our booth had a similar mindset — “we know we should be looking at blockchain, we just don’t know where we should begin”. We’re moving into a new phase of the technology where people understand just how critical it is to achieve success in modernization, but everyone is unsure of where to start. At NRF, we also launched the IBM Institute for Business Value blockchain study for the consumer industry, which looks at early blockchain adopters and where they’re focusing their efforts.
To help you along your journey with blockchain, I’ll address the three most common questions that I received while at NRF.
Will blockchain eventually replace all systems at my business?
Blockchain is both a disruptive and transformative technology; offering up the potential for new business models in the marketplace, whilst allowing existing business ecosystems to remove friction and waste in existing processes.
In essence, blockchain is the new beginning for a wave of “inter-enterprise” systems and capabilities that will challenge the historical preeminence of “intra-company” systems. Distributed ledgers provide much needed disruption to areas that have managed to circumvent updates and refreshes over the past several decades, and 69 percent of respondents surveyed in the recent IBV Consumer Industry study expect to have production-level blockchains implemented at some scale within the next three years.
However, it’s important for companies to narrow their focus when choosing to implement blockchain solutions. The technology can solve a lot of different problems within many aspects of business, but it doesn’t mean that every process should transition to the blockchain. The technology is best suited for specific purposes that involve securely sharing transactional data from a network of business partners, providing clear audit trails of all transactions and their validation, and opening up information in near real time to participants within a network.
Nearly three-quarters of consumer first movers within the blockchain space that were surveyed by the IBV, expect provenance-enabled product safety and authenticity solutions to be the biggest disruptors given that it is more easily facilitated with blockchain.
Business processes with very few participants — largely internal business processes and processes where centralized databases are best placed to manage the data — are unlikely to benefit from being replaced by blockchain solutions. Simply because there is a business challenge, is not a good reason for invoking a blockchain solution.
What should we be listening to, and what shouldn’t we?
You should be listening to experts in the field that are focusing on the nuances of blockchain that will become bigger questions in the future. For example, we’ve focused heavily on how to develop network governance strategies to support long term resiliency and scalability. Healthy networks lead to healthy networks of networks, and when more companies decide to join the 18 percent of consumer industry blockchain First Movers identified in the IBV study, having thought about standards in network governance and interoperability will be key to success.
As to what you should be ignoring, avoid conversations that blockchain can solve all the pressing issues in the consumer industry. Blockchain is an enabler and a new foundation to build on. Accordingly, it should be seen as a platform to leverage and integrate with other powerful technologies, such as IoT, AI and Cloud. When paired with other technologies, blockchain helps build the shared platform where different entities in the value chain can come together and create new value or transform the existing system in traditional problem areas, such as inaccessible marketplaces or those with heavy regulated environments.
We’ve already started working towards implementing blockchain at our company, how can we drive this effort home?
Interestingly, a lot of companies have already started down the blockchain path. We’re at an inflection point between early adopters and mainstream. Blockchain has transitioned out of the point where it’s just regarded as novel technology to something that can be implemented practically at many different levels of business.
If you’ve started working with the idea of how blockchain can fit in, and perhaps even thought about piloting the technology at your company, you should start the process. The technology is mature enough that we can design actual solutions that are resilient, scalable and efficient. Beginning with our team, for instance, is as simple as realizing that we’ve already laid the groundwork for you, and we’ve done so with over 400 blockchain engagements over the past several years!
Just know, you’re not alone with your curiosity for blockchain. We’ve been answering questions together with our early adopter clients through our various projects and through the primary research, which I invite you to check out on the IBV blockchain homepage.
Further, let’s engage about figuring out how to most effectively make blockchain real for your company — let’s ideate on best use cases, identify suitable ecosystem partners for a pilot, and build a durable network together. Reach out to our blockchain experts via the Let’s Talk chat, powered by Watson.
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